Start streakRBI policy terms, budget vocabulary, financial institutions and the basic ideas that every news item in this area builds on.
Useful for: IBPS PO, SBI Clerk, RBI Grade B, SSC CGL, RRB NTPC.
Economy and banking news looks different every week, but the vocabulary underneath it hardly changes. A rate decision by the RBI, a new regulation from SEBI or a Budget announcement is always a case of the same handful of concepts: liquidity, inflation, fiscal balance, credit flow and financial inclusion. If you know the concept, you can answer a question about almost any news item that uses it.
Banking exams ask this section in two ways. Direct questions test terms and institutions (who regulates what, what a rate means). Application questions describe a situation and ask what happens next, for example the effect of a higher repo rate on loan EMIs. Practise both: learn the definition, then predict the consequence.
The rate at which the RBI lends short-term money to banks. A higher repo rate makes borrowing costlier and tends to cool inflation.
The rate at which the RBI absorbs surplus liquidity from banks. It acts as the floor of the policy corridor.
CRR is the share of deposits kept with the RBI in cash. SLR is the share kept in liquid assets such as government securities, gold and cash.
Total government expenditure minus total receipts excluding borrowings. It shows how much the government needs to borrow in a year.
India follows a flexible inflation target set with the government, with the RBI using policy rates to keep consumer-price inflation within the band.
Bringing bank accounts, credit, insurance and digital payments to people who were left out. Jan Dhan accounts and UPI are the standard examples.
Answer: B. Costlier floating-rate loans
Repo is the cost of funds for banks. When it rises, banks pass the increase to borrowers and floating-rate EMIs go up.
Answer: B. Total receipts excluding borrowings
Subtracting receipts that exclude borrowings leaves the gap that must be financed by borrowing.
Answer: B. SEBI
SEBI regulates stock markets and mutual funds. IRDAI handles insurance; NABARD supports agriculture and rural finance.
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